Secured: Ruling ensures money in fund will only be spent on tax refunds

In this file photo, tax refund checks are stuffed into envelopes for mailing. A recent Supreme Court of Guam ruling essentially ensures the government can't touch money meant for tax refunds for anything other than paying those refunds. PDN file photo

A ruling by the Supreme Court of Guam means that money that's supposed to be spent only for tax refunds will be protected from elected officials who want to use it for government operations or other purposes.

Sen. Ben Pangelinan asked the high court for a declaratory judgment on the practice of the Calvo administration to take money from the Income Tax Reserve Fund to reimburse the General Fund for money used to pay tax refunds.

The Office of the Governor said "the suit served no purpose" and questioned why senators "would insist on a measure that makes it more complicated to pay tax refunds."

While the Calvo administration has been paying out tax refunds at a much quicker rate than has happened in the past, the Income Tax Reserve Fund was created by law because money that was supposed to go to pay refunds was diverted for other uses.

For years, even the creation of special funds didn't stop elected officials from raiding the accounts. Instead of responsibly managing limited revenues by reducing spending and cutting costs, elected officials instead chose to ignore financial problems by stealing money meant specifically for refunds and using it for operations.

As a result, people often had to wait for years to get back money -- money that was rightfully theirs. It also led to multiple bond-borrowing efforts by the government of Guam to pay years' worth of past-due refunds, which has resulted in the government, and thus the taxpayers, being burdened by debt for decades.

Without this ruling, it's entirely possible that future governors or Legislatures would have tapped the income tax fund and used the money for other purposes.The high court's decision essentially ensures the government can't touch money meant for tax refunds for anything other than paying those refunds, and that's a good thing.